The steel industry is part of the basic materials sector and consists of companies involved in steel production, mining, and related activities. Although steel has historically been a major U.S. industry, the number of steel mills that produce the metal has declined sharply in the past several decades due to foreign competition. Some of the big names in the global steel industry include Rio Tinto PLC (RIO), Vale S.A. (VALE), and Reliance Steel & Aluminum Co. (RS). Steel stocks, as represented by the VanEck Vectors Steel ETF (SLX), have underperformed the broader market with a total return of -51.2% compared to the S&P 500's total return of -17.6% over the past 12 months. These market performance numbers and the statistics in the tables below are as of March 23.
Here are the top 3 steel stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Steel Stocks
These are the steel stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Steel Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Companhia Siderurgica Nacional (SID)||1.21||1.7||2.5|
|Cleveland-Cliffs Inc. (CLF)||3.19||1.3||3.0|
|Ternium S.A. (TX)||11.37||2.2||3.9|
- Companhia Siderurgica Nacional: Among the largest steel-makers in Latin America, Brazil-based Companhia Siderurgica Nacional produces a variety of semi-finished steel products for use across multiple industries. The company reported net revenue growth of 10.7% for 2019. However, profit for the period fell 56.8%.
- Cleveland-Cliffs Inc.: Cleveland-Cliffs is an iron ore mining company that produces iron ore pellets, lumps, and other materials for use in the global steel industry. The company announced earlier this month that it has completed its acquisition of AK Steel Holding Corp. (AKS).
- Ternium S.A.: Ternium is a Luxembourg-based company that manufactures and processes steel slabs, billets and round bars, hot rolled flat products, merchant bars, reinforcing bars, insulated panels, roofing and cladding, and decks.
Fastest Growing Steel Stocks
These are the steel stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Steel Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Commercial Metals Co. (CMC)||13.11||1.6||341.7|
|Reliance Steel & Aluminum Co. (RS)||74.41||5.0||100.0|
|Worthington Industries Inc. (WOR)||21.10||1.2||63.2|
- Commercial Metals Co.: Commercial Metals manufactures and recycles steel and metal products, and offers related materials and services. Some of its products include scrap metal, reinforcing bars, merchant bars, light structural products, fabricated meshes, and more.
- Reliance Steel & Aluminum Co.: Reliance Steel & Aluminum operates as a metals service center that provides alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products as well as related processing services to customers in a broad range of industries. The company also offers precision sheet metal fabrication services and manufactures metal parts for a variety of different end uses. Reliance Steel & Aluminum announced in January that it had completed its acquisition of Fry Steel Company, a general line and long bar distributor.
- Worthington Industries Inc.: Worthington Industries is a diversified metals company that manufactures equipment for heavy machinery, ceiling grid materials, and more. The company announced in January that it has acquired a majority ownership in the Samuel Steel Pickling Company, a joint venture that Worthington has had with Samuel, Son & Co. since 2010.
Steel Stocks with the Most Momentum
These are the steel stocks that had the highest total return over the last 12 months. The top three momentum steel stocks all have negative total returns, but they are still the top three performers amid a market that has fallen dramatically over the past month.
|Steel Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Reliance Steel & Aluminum Co. (RS)||74.41||5.0||-14.0|
|Commercial Metals Co. (CMC)||13.11||1.6||-16.3|
|Mechel PAO (MTL)||1.30||0.4||-40.1|
|S&P 500 (SPY)||N/A||N/A||-17.6|
|VanEck Vectors Steel ETF (SLX)||N/A||N/A||-51.2|
- Reliance Steel & Aluminum Co.: See above for company description.
- Commercial Metals Co.: See above for company description.
- Mechel PAO: Mechel is a Russia-based company that operates in the mining, steel, and power businesses in various markets throughout the world. The company also offers transportation logistics services, and generates electricity and other power resources.
YCharts. "Financial Data," Accessed Mar. 23, 2020.
Companhia Siderurgica Nacional. "Results for the Fourth Quarter and Year of 2019," Page 16. Accessed Mar. 23, 2020.
Cleveland-Cliffs Inc. "Cleveland-Cliffs Completes Acquisition of AK Steel," Accessed Mar. 23, 2020.
Reliance Steel & Aluminum Co. "Reliance Steel & Aluminum Co. Completes Acquisition of Fry Steel Company," Accessed Mar. 23, 2020.
Worthington Industries Inc. "WORTHINGTON INDUSTRIES ACQUIRES A MAJORITY OWNERSHIP OF SAMUEL STEEL PICKLING COMPANY," Accessed Mar. 23, 2020.